Vitesse says its latest financials are "not reliable"

LONDON  Vitesse Semiconductor Corporation has announced that its previously reported financial statements for the three months ended December 31, 2005 and possibly even further back, should not be relied on.

The Camarillo, California-based chipmaker earlier this month suspended three senior executives, including its CEO Louis Tomasetta and CFO Yatin Mody, and launched an investigation into certain stock option grants.

The company also announced that Shawn Hassel, a managing director with advisors Alvarez & Marsal LLC, will serve as Vitesse's acting CFO, effective immediately.

Vitesse revealed that its internal investigation has raised questions about the integrity of documents related to stock option grants. It also said that its management report on internal controls over financial reporting no longer can be relied on, nor can its report for the quarter ending Sept. 30, 2005.

Vitesse also said other irregularities have been discovered about practices in connection with credits issued to or requested by customers, as well as the application of payments received to the proper accounts receivable. The company said accounts receivable and revenues may have been misstated, but the extent of this is still under investigation.

It added the special committee of independent directors “are working as expeditiously as possible to complete the internal investigation.”